Egypt's United Networks Mobile Limited did not acquire one of the three licenses offered for mobile networks in Nigeria. The bidding heated up, having started from the initial price of $100 million to jump to $300 million. However, in order to attain three qualified bidders, the price of each license was lowered to $285 million.
OT’s final bid was for $265 million. We believe that once the bidding crossed the $225 million threshold, the license became overvalued. OT’s pullout from the Nigerian license bid has eliminated the potential LE1-LE5 premium that would have been added to OT’s DCF valuation, based on a license value ranging from $110-150 million. However, we still maintain our Strong Buy for Orascom Telecom with a target price of LE71.
On another note, OT was able to acquire one of the two mobile networks licenses in Syria. The Syrian
Telecommunication Establishment hopes that the two operators will expand its network to accommodate 1.7 million subscribers compared to the current 30,000 subscribers. OT’s investor relations department will issue a press release soon concerning its Nigerian bid and full details of its recent Syrian license acquisition.
Prime Securities S.A.E.
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